Google (Nasdaq: GOOG) says it is not making a political statement, but the company's decision to "design and manufacture" one of the two devices it introduced today in the United States nevertheless will sound like a clarion call to arms as it stakes out numerous fronts in an intensifying war for market share in the wireless devices market.
That struggle has recently led the company even deeper into the electronics hardware market. It developed the Android operating system to challenge Apple Inc. (Nasdaq: AAPL) in wireless handsets, acquire Motorola Mobility partly to gain patents and armor itself against lawsuits, and today launch two hardware devices, including a tablet PC and media player.
A report in The New York Times indicates Google isn't hesitant about engaging in some subtle propaganda messaging too. Google's Nexus Q media player (launched today), had the words "Designed and Manufactured in the U.S.A." inscribed into its base, according to the New York Times article.
Google executives said the company decided to manufacture the Nexus Q, a wireless device that can stream music and video from You Tube when connected to a TV or a speaker system, in the US because "we've been absent for so long, we decided why don't we try it and see what happens?" Andy Rubin, the executive cited reportedly claimed Google "was not engaged in a crusade."
Google may not be interested in a crusade but it may have started one, wittingly or unwittingly. The subject of where US-headquartered companies manufacture their devices is a touchy one in the country and many enterprises have had to withstand withering criticisms leveled by folks angered by the outsourcing of production jobs over the last 20 or so years to lower-cost centers in the Far East and Eastern Europe.
Google's claim that it is merely testing the feasibility of local manufacturing notwithstanding, the ramification of its moves are huge for electronics companies, including rivals like Apple and Amazon.com Inc. (Nasdaq: AMZN), with which it is now locked in a nasty fight for market share in the wireless devices market. Today, Google also unveiled its first tablet PC, a seven-inch screen device many believe is aimed squarely at Amazon's Kindle tablet and smaller form rivals like the Nook from Barnes & Noble.
Will Google follow the Nexus 7 with a larger tablet PC to take on Apple's iPad? I believe this is very likely. At least, I won't be surprised if Google starts selling a larger tablet PC. The Nexus 7 tablet PC from Google was manufactured in Asia, unlike the Nexus Q media player. But what if Google finds -- from the Nexus Q experience -- that a locally produced device can be profitable and competitive against rival equipment made elsewhere? That may move the company to start manufacturing both the Nexus 7 and a larger variant in the United States, putting pressure on rivals to seriously consider the hidden benefits of local production.